Does Advertising Communicate Product Quality to Consumers? Some Evidence from Consumer Reports

Abstract This article reports the relationship detected between retail price, product quality (as determined by a major consumer testing agency), and advertising. Retail price was not significantly correlated with product quality for a majority of the products investigated here. However, analysis of a nominally-valued measure of advertising indicates that heavily-advertised products earn an unusually high proportion of top quality ratings. These findings are assessed in light of their consequences for consumer decision-making.